Mumbai (Maharashtra) [India], Sep 16 (ANI): Shares of Lakshmi Vilas Bank jumped by nearly 10 per cent on Wednesday morning after the troubled private sector lender said that mutual due diligence process for merger with Clix Group is substantially complete and both parties are in discussions on the next steps.
Under the non-binding letter of intent, the proposed amalgamation is subject to completion of mutual due-diligence, regulatory and other customary approvals.
"As per the mutual understanding between parties, the exclusivity period was extended till September 15 due to the prevailing pandemic situation," said Lakshmi Vilas Bank in regulatory filings at stock exchanges.
The bank will continue to share any further information as and when they materialise, it added. At 11:55 am, the bank's stock was trading 9.83 per cent higher at Rs 22.35.
In mid-June, the lender had signed a preliminary, non-binding letter of intent with Clix Capital Services and Clix Finance India. Early this month, Lakshmi Vilas Bank said it plans to raise up to Rs 1,500 crore to fund business growth and increase foreign shareholding to up to 74 percent.
Established in 1926, Lakshmi Vilas Bank is one of the oldest private sector banks based out of Tamil Nadu. Its net advances last year stood at Rs 20,103 crore and deposits at Rs 29,279 crore.
In September last year, the Reserve Bank of India (RBI) had initiated prompt corrective action for the bank after the Economic Offences Wing of Delhi Police began probing allegations of cheating and criminal breach of trust against its directors of the board.
The RBI's crackdown was on account high net non-performing assets, insufficient capital to risk-weighted assets ratio (CRAR) and common equity tier one (CET1) and negative return on assets (RoA) for two consecutive years, and high leverage based on on-site inspection under the risk-based supervision carried out for the year ended March 31. (ANI)